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Montvale can strategically use bond funding to pay for large-scale improvements, spread the costs over time, and capitalize on new state aid that won’t come to the district without a voter-approved referendum.
With an eye on the future, the Montvale Board of Education will hold a bond referendum as a strategic budget move.
With an eye on the future, the Montvale Board of Education will hold a bond referendum as a strategic budget move.
Generate up-front funding to meet current and future needs for instructional space – both the kinds of space where we educate students, and the amount of space we need to do that with small class sizes the community values.
Spread costs over time – older taxpayers may move away, while newer residents pay their share. It’s part of a strategy to continually invest in school excellence, with a steady tax rate corresponding to that.
Bond-funded projects are eligible for state aid to reduce the local cost – paying for those projects within the regular budget puts 100% of the costs on property tax bills. That state aid comes from taxes collected from across New Jersey; it is only shared with school districts where voters approved bonds.
Project costs are estimated at $29,414,000. That includes not only actual construction and renovation work, but professional and permit fees. It also includes a contingency in case estimates don’t accurately predict the future.
State aid is estimated at $7,158,184. The Department of Education has committed to paying that over the length of the pay-back, an annual contribution as if the state is helping to make payments.
That state aid is only for voter-approved, bond-funded projects. Without this strategic budget move, important improvements such as routine replacement of building system and renovation of classrooms would fall 100% on local taxes.
Estimated Tax Impact
Estimated Tax Impact
The tax impact is estimated to be about $325 per year for a home assessed at Montvale’s average of $524,788. The school district recently finished paying off debt that voters approved 20 years ago to build the Memorial kindergarten wing and gym. For the average home, the annual payment on that had gradually declined to about $100 until it was paid off in 2021. This proposal asks voters for a new investment to meet the evolving needs of the Montvale students and community.
This is part of the Board of Education’s strategy to leverage the state aid that comes with a voter-approved bond and to maintain our excellent schools. An ongoing goal of the district has been to continually invest in repairs and renovations, and to keep the tax rate level to do that. It paid off debt and planned a 2020 bond referendum to seamlessly continue the tax rate, but the pandemic pushed that to the back burner as we focused on safe and smooth school operations.
If approved by voters, this change would appear on property tax bills in 2022.
What is assessed value?
What is assessed value?
Assessment is a figure used just for the purposes of calculating taxes and is listed on a homeowner’s annual property tax bill. Assessed value is different – usually much less – than what a home might sell for in today’s market.
Financial Perspective:
Financial Perspective:
From the Taxpayer’s Viewpoint
From the Taxpayer’s Viewpoint
Parents of current students – and those of the future – will invest in Montvale schools financially and with their children’s education. But the Dec. 14 bond referendum has a wider impact.
Replacing aging equipment with more efficient systems is better for the annual budget. Getting state aid to share the cost is another budget bonus.
The quality of the community, as well as the ability to swiftly and profitably sell property, is strongly tied to the quality of its schools. Modernized Montvale schools can stand out among communities that compete for future home-buyers who will pay taxes for years to come.
A resident considering selling a home in the next 5-8 years can consider the cost of the proposed improvements as an investment toward a higher selling price and/or easier selling process. At $325 per year, that investment would be an estimated $1,625 to $2,600.
Why are the financial projections based on such conservative numbers?
A series of estimates are used to make the bottom-line projections of the project costs and tax impact. Those estimates are generally conservative so that any surprises are welcome ones, i.e., lower than expected. For instance, the project costs already include a contingency in case the estimates don’t accurately predict the future of supplies or labor. The interest rate of the bonds is estimated slightly on the low side, pending what those bonds sell for when advertised for competitive bidding. In Montvale’s case, the estimates do not include any increase in “ratables,” the future development of properties that are expected to contribute to the property tax base. A conservative approach protects the interests of voters and taxpayers, adding a layer of assurance that even with “unknowns,” the work that voters may approve can be done within the impact that taxpayers were told.
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